This really is an excellent application for one of the ultra high efficiency mini split heat pumps. They are very quiet to near silent and have a SEER of 19+, work down to near 0degF. We have been very happy with the LG unit we installed in our master bedroom but others have reported similar good results from Fujitsu and Mitsubishi. I think Fedders is getting into this market but have not seen thier units. For the price, I was very impressed with the level of technology included in my LG. Variable speed blower, varialble speed compressor, varialble speed outside fan all microprocessor controlled. Full function remote control with temp readout and did I mention its quiter than our hunter ceiling fan?

Almost a fifth of the price involves allowances. Allowances are not prices they are estimates. You will be expected to pay the actual cost of hiring an electrician and plumber which could be a far greater amount than estimated. Make sure the allowances are only for materials and subs; his labor should be in the base bid price. Ask if he will mark up materials and subs covered by allowances. You will need an exhaust fan with a duct to the outside. You didn't say where the project is located but you will probably have to provide heat for the space. It seems pretty obvious that this room will be used as a sleeping room so one or two hard wired smoke detectors will be needed. A carbon monoxide detector MUST be installed. I would guess the project will cost well over $20,000 not including what you buy unless the contractor is uninsured, and ignores licensing and permitting requirements. As for minimum space and height requirements, if the local code is based on the 2009 IRC, the 70 s.f. minimum floor space for a habitable space (bathrooms are not considered habitable spaces) includes the space where a sloped ceiling is 5 ft or higher and a level ceiling is 7 ft. or higher for a minimum of 50% of the required room floor area. The minimum height of a habitable room level ceiling is 7 ft and 5 ft at a sloped ceiling. A bathroom must have a ceiling height of 6-8 in front of each fixture. The required "means of egress" from all spaces in the house must be 3-0 wide for corridors and stairs and lead to an outside door without passing through a garage. Habitable attics and every sleeping room, in addition to a means of egress, must have an "emergency escape and rescue opening" of 5.7 s.f. (min. 24" high and 20" wide) with a max. sill height of 44" above the floor. You need to decide if the habitable space will be used as a sleeping space because the building inspector will either ask you or just assume it is one. As for insulation, some jurisdictions have different requirements for an existing structure which may be contained in the International Existing Building Code or state amendments to the IRC. Where I live the wall, floor and roof cavities must be filled with insulation equivalent to fiberglass batts however you might want more depending on your climate and cost of heating fuel. As for the structure, the framing seems fairly new so if it was really labeled as a "bonus" room on the original permit drawings it would have been designed for a habitable space load instead of a storage load. All of this should be covered by the tables in the building code so an engineer should not be needed unless the knee walls are intended to transfer rafter load to the floor joists. The worst case is you would need to open the garage ceiling to add some joists but it might be wise to open the ceiling anyway because the best way to seal the floor is to spray an inch or two of foam insulation from below, in fact I don't know of another way that works. Putting a sleeping room over a garage requires great care. I would have two CO detectors in the new space, one hard wired and one battery operated. CO is a dangerous killer. I would have lost a client if newly cut flowers had not wilted soon after delivery.

No there is not 7feet of headroom. I understand that this not "Legal" but I am not really worried about that. Living space is really ways a way. if I go down that road I would find an engineer to look at it. Storage space is really the main objective. I find it hard to believe that with 2x4's and 3/4" is NOT sufficient. I mean I stand on the rafters now and I am 200lbs. I know I know weight distribution over time is different than momentary impact. What is the best way to shore up the joists to make them stronger? thanks

When I did a major remodel and added a second floor, the contractor bagged up the and disposed of the blown-in insulation that was in the ceiling of the first floor precisely so that the HVAC system could work optimally. If you leave your insulation in place it will mean is that the attic is not part of the main heated building envelope. Ideally only the outer parts of the building are insulated so that there is free transmission of energy to all rooms. Presumably, you are insulating the walls and ceiling of the attic. In practical terms, you would be dealing with two heated envelopes rather than just one, so you want to pay attention to how the heating/cooling supply to that area is designed so that temperatures in the attic can be adequately controlled. Leaving it in place is not a terrible thing, just not optimal.